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My cards are very close to be maxed out. Which should I pay first?

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Super Contributor

Re: My cards are very close to be maxed out. Which should I pay first?

Pay the Citi card to zero. High rate, workable balance and you will likely see BT offers at some point. 

Pay Diners to zero due to the high APR. Did you go over limit or something to get that APR?

 

After it is paid to zero, use the Diners only for charges and pay in full each month. This helps reduce the other cards. 

 

Keep up up with all the minimums, transfer the Best Buy to Citi if possible. Try to get all cards below 50% utilization soon. 

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 11 of 27
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Established Contributor

Re: My cards are very close to be maxed out. Which should I pay first?

I highly doubt the OP is going to be getting any increases with cards maxed out like that. I would start with the highest APR cards and work it from there.
Message 12 of 27
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Super Contributor

Re: My cards are very close to be maxed out. Which should I pay first?


@Anunaki wrote:
Hello, After a few months of being unemployed, I got a new job and with it came a Sign On Bonus of $6000. I know it wont cover my huge bill, but at least I want to make best distribution of this money Into these cards.
Thanks

America Express $3960 balance/$4060 credit
Citi $1985/$2000
Wells Fargo $8233/$8300
Chase $1300/$1400
Best Buy $900/$1100
diners $2800/$3200

I'm assuming you're going to clear around 4k.

 

So what I would recommend is to pay off Best Buy, Chase, & most or all of Citi.


Total revolving limits 646000 (570000 reporting) FICO 8 EQ 712 TU 739 EX 727

Message 13 of 27
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Valued Contributor

Re: My cards are very close to be maxed out. Which should I pay first?

A $6k bonus comes with a 25% federal supplemental tax plus 7.65% for FICA (assuming you're in the US). If you're in a state with income tax, that needs to be added too. So minimally you are going to "lose" 32.65% or $1,959. Personally, my state sucks and bonuses are taxed at 6.5% which puts me at netting about 60% of my bonuses. Smiley Mad

 

At any rate, I am also concerned that something happened to cause you to have 30% APR on several cards. I would be shocked if you're not balance chased on a few. 

 

RIght now, score can't be the focus, not with that utilization (which IS maxed, btw) and those APRs. You have to pay off what you can.  When does the promo expire on the Chase card??

11/2017: EX 704 | TU 720 | EQ 672 -- Starting (2/2016): 630 | 620 | 580 -- INQs: 17 | 26 | 28 (last 6 months: 5 | 2 | 6)
AMEX Delta: $10k, Marvel: $8k, Discover IT: $7.2k, AMEX BCE: $6k, Target MC: $5k, PayPal 2%: $8k, CO QS: $2.6k, Merrick: $1.6k, Barclay's NFL Rewards: $1k, CO BuyPower: $500. And a mix of well-loved store cards.
Message 14 of 27
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Community Leader
Senior Contributor

Re: My cards are very close to be maxed out. Which should I pay first?


@Anunaki wrote:
America Express $3960 balance/$4060 credit 29.99%
Citi $1985/$2000 29.99%
Wells Fargo $8233/$8300 21.00%
Chase $1300/$1400 0%
Best Buy $900/$1100 24.99%
diners $2800/$3200 29.99%

SJ, Chase is at 0%. Smiley Happy

 

I'm a fan of making cards so they're no longer maxed (88.9% of the limit or below). But doing that in one swoop would require a fairly large payment to Wells Fargo at the expense of dealing with cards with humungous interest rates.

 

Here's my suggestion:

 

American Express $370 (no longer maxed)
Citi $1985 (paid in full)
Wells Fargo minimum plus current interest charge
Chase $75 (no longer maxed)
Best Buy minimum
Diners $2800 (paid in full)
—————
Total: $5,230

This leaves about $800 unspent that can go toward either AMEX or Wells Fargo.

 

Keep in mind that when you pay off a card, there'll be trailing interest on the following month's statement. The amount will be tiny and should be paid off immediately after the statement cuts.

Message 15 of 27
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Frequent Contributor

Re: My cards are very close to be maxed out. Which should I pay first?

Anunaki

 

as several posters have noted, find out how much you have left after taxes. If the 6K is net that is great but being a round number, i would bet it is not net.

 

next figure out which one you want to use as a daily driver. you will have gas and other expenses going to work.

 

At this point score is not your main concern, and frankly even interest is second to getting total amount owed down.

 

Assuming you have enough left over after taxes I would pay 50% of citi and chase.

pay minimum + 25 bucks on Best Buy, split anything left on the others.

 

Then depending on your paychecks and monthly debt (rent etc) I would first kill best buy and pay minimums + whatever-you-can on the others each payday.

sock drawer the Best Buy.

then re-evaluate your balances against your paychecks and that against your needs (not wants). Make sure to go out at least once a week, just don't do expensive stuff.

with the re-eval look at what account can then be paid off fastest (this assumes also paying off dairy driver in full). pay off that card and put rest available to other cards. If you cannot pay off a card in full, pay off as much as possible on one card.

 

Assuming you net 5K a month and have 2500 available to spend on debt repayment, (those are just random numbers) against your 19K debt (minus the chunk from your signing bonus) you could have 3 cards PIF in a month of work (citi, chase, and best buy totaling 4,185).

 

If that holds true then the next month do the same against the remaining 15Kish debt. Third month you would owe about 12.5K and then I would worry about highest balance on highest interest rate card.

 

I suspect you will have paid off about 9K  at this time depending on the tax hit to your hiring bonus. You will also come into the zone for a personal loan depending on income and have about 11K in available credit.

 

America Express $3960 balance/$4060 credit
Citi $1985/$2000
Wells Fargo $8233/$8300
Chase $1300/$1400
Best Buy $900/$1100
diners $2800/$3200

Starting Score: EQ 628 | TU 643 | EXP 618
Fico 8 12/22/16: EQ 658 | TU 682 | EXP 721
Next Goal:        700's across the board
Credit Karma:   EQ 554 | TU 551
CK 12/22/2016: EQ 637 | TU 637
Message 16 of 27
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New Member

Re: My cards are very close to be maxed out. Which should I pay first?

Thank you all for the feedback.

The bonus is already taxed, so it is $6K net.
Message 17 of 27
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New Member

Re: My cards are very close to be maxed out. Which should I pay first?

I got the Chase card just before I was laid off back in Oct. The promo expires in Dec this year.

Yes, on the Citi and Best Buy I was balance chased a couple of months ago.
Message 18 of 27
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Valued Contributor

Re: My cards are very close to be maxed out. Which should I pay first?

If u r unable to pay the remaining balance off quickly I would first apply for a card with a 12-18 mo zero APR promo. You will have to pay around 3% BT fee but that is a bargain. If u r unable to get another card go fo a personal loan and consolidate.  


AX Hilton Aspire 20k, AX Bonvoy Brilliant 15k, AX BCP 2k, AX Blue Bus Cash 15k, AX Delta Air Platinum 49k, (AU) AX Delta Gold 15k, AX Amazon Prime Bus 25k, BC Uber 29k, AKUSA FCU -10k , CITI AAdvantage Exec World Elite MC 16.5k, Discover (2) 16k, Kohls-4k, VS Comenity $3k, BofA AK Air Siggy 9.8k, WF Propel AX 5k, JCP $10k PFCU Plat Rewards Siggy 39.5k, PFCU Power Cash Rewards AX 10.5k, NFCU Flagship 50k, CLOC 15k, CITI Costco 9.5k, GAP VISA Synchrony $9k,Target MC 9k, Ulta MC Comenity 9k, Pay Pal 1k, CO Venture One 23k, US Bank Radisson Rewards Signature 10k, US Bank Fred Meyers World MC, 11k, US Bank Plat VISA 15.7k, VS Comenity 2k, 240k total available credit. Utiliz-2%, Current FICO EQ-724, EX 763,TU 802 ,Chapt 7 BK D/C 11-2012. Starting scores 520-550
Message 19 of 27
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Regular Contributor

Re: My cards are very close to be maxed out. Which should I pay first?


@ABCD2199 wrote:

Make minimum payments on the 3 cards with the lowest APR, then do equal payments across the other 29.99% cards to bring utilization down on them.

 

You need to get all your cards down to 0% except for one card where you keep the statement balance between 1 and 9% by using it each month and paying it down back to 1-9% (but not 0%).  So even with a new job, stop spending money on non-essentials until you get your cards back to 0% except for one card.


Just to clarify this point, always pay it down to zero after the statement cuts. That way the util will report and by paying it off you will not be charged interest. the but not 0% refers to the reporting not carrying a balance from statement to statement

Message 20 of 27
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